In past episodes of this opportunity series, we discussed Apple announcing a billion-dollar construction project. We discussed wearables; technology; the jobs report; drones; and people moving from one region to another. What I hope you've been coming away with is you just need to look at the business pages and see what's going on in the news. You should see opportunity everywhere.
example, a couple of years ago an article about a building supplies company in
the US appeared in the newspaper. The company actually supplies a lot of
construction materials, home remodeling equipment, light fixtures, appliances
and different things you can use to remodel your home. Mostly do it yourself
jobs, but they also have a portion of their business where building contractors
come in and purchase supplies. Interestingly, they made an announcement that
they planned to hire 65,000 people. This was an article that delineated the
company’s plans. Let's look at some of the details of the announcement. The
company said some of the jobs were going to be permanent and some temporary. The
announcement came just two months after they said they were closing
underperforming stores in the US and Canada as part of a reorganization effort.
The company indicated that about 50,000 of the positions would be seasonal, 10,000 would be permanent, and 6,000 people would be hired as full-time assistant store managers and department supervisors to help improve customer service and leadership. They said that they were sharpening their focus on retail fundamentals and simplifying their business. That's what the CEO and president said. They also said they were investing in key leadership positions across their stores to enhance customer service, while also creating jobs that would improve the availability of their most popular products; transform their technology infrastructure; and provide more access to the home improvement expertise of their store associates for customers. Now for the coup de gras -- they said they planned to eliminate some in-store support functions like their project specialists interiors program to simplify operations.
The company additionally went on to say they would close 20 stores in the US; 30 stores in Canada; and 99 affiliate hardware stores -- and they were writing down 390 million to $475,000,000. Now this press release was a lot more detailed about a company's strategy than you typically would see, but man, oh man, did this news release tell you a lot about where the opportunities were.
good news and bad news here. Let's get to the bad news -- which is that a good
bit of planning that they needed to do had already been done by the time they
made the announcement and they made it public. A tremendous number of decisions
had been made. Therefore, the wide-open scope of opportunities wasn't there.
If you had already been into the company before this happened and were able to be a part of that discussion, you clearly would have been able to have a greater impact and more opportunity. However, the window of opportunity is still substantial even though you're now hearing about this post announcement. Ask yourself “what do I do and how might my business play a role”? This company is going to spend a lot of money to bring 65,000 people in, which is part and parcel to why they closed a lot of stores and the hardware business because they wanted to create the cash to make this new investment that they think is going to lead them down the road.
This is a significant strategic change for them, so let's ask ourselves a few questions. Why would the company be looking at doubling down on what appears to be their core business? Home improvement retail, not home improvement commercial. They're not looking to go after B-to-B business. They're going to retail, so they're not necessarily interested in contractors. They're betting the farm that they're going to get homeowners to come to their stores. They want to improve the in-store experience, so they believe people are going to come into their store. They don't necessarily believe that people are going to do all their research on the internet. They believe there is a group of people that is going to come in and still want that in-person experience, and they're doubling down on the fact that they believe the home improvement market is going to be a growth market for the next three-to-five years.
This company is not making a 65,000 people investment assuming that they don't have a growth market. Now, they may be wrong, but if they're right, I want you to think about why they were doing this and what did they see? This is a pretty substantial company - one of the major players. What are they seeing that is counterintuitive?
what's called “leading” and “lagging” indicators. Home construction is
typically a leading indicator and if you start watching what's going on with
companies like Lowe's and Home Depot and Toll Brothers (who is actually a developer)
you start getting a sense of where that industry is going. In this case, this
company is betting the farm on consumer spending and they're betting the farm
that 65,000 people should help them to further solidify their position in the
consumer space for home improvement.
Home improvement includes a couple of different things -- new home purchases, or people doing renovation on their existing homes. It's kind of significant here with this company that they're saying this is the future for them. What does that mean for you? What that means for you is can your business do anything to support the company’s goal of improving upon their experience with homeowners?
given us some clues here. They said they wanted to hire store manager's
department supervisors. They want to improve customer service and leadership,
and they want to create jobs that will improve the availability of their most
popular products. They might need some help in figuring out how to do that. What
are they going to do with their products that aren't so popular? They then go
on to say they want to transform their technology infrastructure. What does that
mean? Might they want more automation? Maybe they want more demos in store.
Maybe they want people to be able to walk into a store and get a picture of
what something that they see on the shelf might look like in their homes. Maybe
they want to develop apps or holographic information or 3D information or other
types of things so that they can create a better user experience.
They go on
to say that they want to transform their technology infrastructure and provide
more access for customers to the home improvement expertise of their store
associates. They're saying that whatever it is that their associates think
might solve the problem that a residential customer brings in, somehow or
another they want to have a technology infrastructure that allows the customer to
take advantage of their expertise. Don't get blown away here about the
technology. What I really want you to focus on is all of these are going to be
projects -- all of this is going to be leading edge. All of this is going to
bring a new experience from the company to their customers via their
This new technology is going to require upgrades to their systems and processes. They're going to have to look at their IT infrastructure. They're going to have to look at their management and leadership training programs. They're going to have to rethink what the customer experience looks like and how their associates begin to deliver. In this case, you can probably start thinking about if the next generation of home buyers is millennials, or your AirBnB aficionados, or your Instagram folks, what does that experience look like?
You now have
to think through a little bit more how your business plays into all of those
things. Assuming consumer durables is not one of your market segments this may
not be one of the opportunities you want to go after right now, but if you are
doing something that fits right into this, this is an amazing opportunity. There's a whole host of things that they can
do, but I still want you to imagine what it takes to onboard 65,000 people in
What are the processes that somebody puts in place to onboard 65,000 people in 12 months? They said 50,000 of them were going to be seasonal, so now they have to off-board 50,000 of those people. Now, what might your company do? What services might you offer that helps them to identify the permanent people, and get them ingrained in the company culture? And then what might you do with those 50,000 people? What processes might you offer to help offboard those people into wherever it is they need to go next? Where did they come from? Who might have the next industry that would require the skill sets of those folks If these are people comfortable with seasonal work?
There was a
huge nugget in the article when it talked about the company closing all of
their hardware stores and having to write down 390-million-to-475 million. What's
going to happen to those buildings? What's going to happen to those communities
in which all hardware stores were located? What's going to happen to all that
inventory? Is there anything that your company does that helps to manage that
entire shutdown process, or might there be some things you can identify so that
rather than making the decision to shut down they can get greater utilization
out of all the resources that they had at those stores? We often don't get a
company laying out for us precisely what their strategy is -- what they're
hoping to gain.
If you walk
into this company and you start sharing with them what specific element of the
things that they lay out in this article you can help them with, you're going
to have a customer for life. You're going to have more opportunities than you
know what to do with.
I was reading the newspaper and this opportunity appeared, so at that time I
could have done the following: fired up my network; got on Linkedin; talked to
some of my neighbors. Who did I know that worked at the company? Who did I know
that could have gotten me in so I could talk to somebody? Where did I vector in
and what could I have validated was something that they were working on at that
Before I end,
let me make sure I discuss one other opportunity presented by this article. How
did this impact the company’s competitors and what could you have done to help
them? There was going to be a tremendous amount of repositioning going on just
by the mere fact that they made this announcement and their competitors were
trying to figure out how they were going to respond in the marketplace. So, if
you had a great solution and you couldn't get it in at the company hiring
65,000 people, you might very well have gotten it in at their competitor’s by
saying, “here's something that we thought your competitor could have taken
advantage of, but it looks like they didn’t. You can actually take market share
from them because they weren't smart enough to take us up on what we believe is
a game changer for them. At any rate, I just wanted to put that out there for